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UNITED
STATES � ANTI-DUMPING MEASURES ON
Report of the Panel (Continued)
RESPONSES OF THE UNITED STATES TO QUESTIONS
FIRST MEETING OF THE PANEL
(29 June 2000)
CONTENTS
NOTE: In this submission, including the exhibits, the US has placed information which POSCO has previously designated as business proprietary information in brackets ("{ }"). This information has been omitted and the brackets left in the text."{ }"
I. RESPONSES OF THE UNITED STATES TO QUESTIONS POSED BY THE PANEL
Q.1. For the United States. Does the United States agree with Korea that the first sentence of Article 2.4 represents a "free-standing and substantial" rule? If not, please explain your view, taking into account the differences between the Tokyo Round AD Code and the WTO AD Agreement in this respect.
1. The United States does not agree with Korea. It is the view of the United States that the first sentence of Article 2.4 cannot be divorced from the context of the remainder of Article 2.4. While the first sentence of Article 2.4 establishes the requirement to make a "fair comparison", the remainder of Article 2.4 defines how "this comparison" is made.
2. The predecessor to Article 2.4, Article 2.6 of the Anti-dumping Code, also defined what was required "[i]n order to effect a fair comparison" (emphasis added). The "in order to effect" language of this provision was ambiguous. One possible reading of this language was that the fair comparison was not required, but if a Member wished to make one, it should do so as instructed in Article 2.6. Thus, all of Article 2.6 could have been read as non-mandatory. In other words, Article 2.6 clearly mandated how to make a fair comparison, but the fair comparison itself was not clearly mandated.
3. That ambiguity was eliminated in the current Agreement by adding the first sentence of Article 2.4, which makes explicit the requirement to make a fair comparison. However, the remainder of Article 2.4, like its predecessor, defines the comparison. Thus, Article 2.4 of the current Agreement is clearly mandatory - it requires members to make the fair comparison, and instructs them how to do it. This interpretation of Article 2.4 is also consistent with its drafting history. In what is known as the "Dunkel Draft", Article 2.4 read:
4. Arguably, that formulation was ambiguous as to whether the requirement to make a fair comparison was free standing. In the final draft, however, the language was amended to read:
5. Substitution of the phrase "this comparison" establishes a reference back to the subject of the prior sentence, i.e., a fair comparison, which is what is being defined.
6. Further support for this reading of Article 2.4 is found in the first sentence of Article 2.4.2 which refers to "the provisions governing fair comparison in paragraph 4." The plural term "provisions," as well as the reference to "paragraph 4," rather than "the first sentence of paragraph 4," make clear that this clause refers to the entirety of Article 2.4. Further, this clause clarifies that the entirety of Article 2.4, and not just the first sentence, constitutes the provisions which "govern fair comparison."
7. In light of the object and purpose of the AD Agreement, there is no basis for an interpretation of Article 2.4 that divorces the obligation in Article 2.4 to make a fair comparison from the allowances required to establish price comparability. In accordance with Article 2.1, a dumping analysis is based on a comparison of prices for sales in the export market to prices for sales in the home market. By requiring due allowance for all factors affecting price comparability, Article 2.4 assures that the prices used to establish dumping in Article 2.1 are "comparable," i.e. a comparison of such prices is fair. There is simply no logic in asserting that even where transactions in the two markets are rendered comparable in all respects affecting price, comparing them in a dumping analysis could be unfair.1 The concept of fairness and the concept of comparability are inseparable.
Q.4. For the United States. Please explain how, in the view of the United States, exchange rates can affect the comparability of export prices and prices in the market of the exporting country.
8. Prices can only be compared when they are expressed in a common currency. Therefore, when comparisons of prices are made in respect of sales made in different currencies, exchange rates are an essential element in establishing prices in one of the markets for purposes of comparison with prices in the other market. Converting to a common currency, however, does not automatically render comparable all prices in the two markets irrespective of the time at which those sales were made. Even if no conversion of prices is necessary, it does not follow that it would be appropriate to compare prices without regard to the timing of the sales being compared. Regardless of whether the comparisons involve prices originally denominated in the same currency in both markets or the comparisons involve converted prices in one of the markets, comparisons can be affected greatly by the relative timing of the sales compared. Therefore, time must be a factor considered by authorities in determining what prices should be compared. Indeed, Article 2.4 requires that time be taken into account when comparing prices by requiring that comparisons be as contemporaneous as possible.
9. All price comparisons, whether made on an average to average basis or on a transaction to transaction basis, must take into account the provisions of Article 2.4. In particular, Article 2.4 requires that comparisons be made in respect of sales made at as nearly as possible the same time. Hence, Article 2.4 recognizes that time is a factor that authorities must consider in determining what prices should be compared. Moreover, not only does Article 2.4 recognize that time affects price comparability, it further requires that comparisons be made between sales separated by as short a period of time as possible. Therefore, in general, comparisons between sales separated by a short period of time are preferred over comparisons between sales separated by a longer period of time.
10. Neither Article 2.4 nor any other Article of the AD Agreement specifies an amount of time between sales that is appropriate or allowable for price comparison purposes. Accordingly, authorities are obligated to determine how best to implement the "same time" provision of Art. 2.4. In light of Article 2.4's preference for comparisons between prices in respect of sales made as nearly as possible the same time, if authorities choose to compare sales made more distant in time when it is otherwise possible to make comparisons that are more contemporaneous, they must ensure that the intent of Article 2.4 is not violated, that is, that time itself is not a factor that affects the price comparisons. Nonetheless, while authorities may determine under appropriate circumstances to compare sales across wider, rather than narrower, spans of time, this does not mean that authorities are obligated to make comparisons between sales further apart in time rather than between sales made closer in time.
Q.1. For both parties. Were all of the sales to ABC Company in the plate and sheet investigations made through POSAM? If not, please provide details.
11. Yes, in both cases all of the sales to ABC Company were made through POSAM.
Q.2. For both parties. Was there any evidence/argument in the record of the plate and/or sheet investigations relating to whether POSCO had any knowledge of ABC company's precarious financial condition at the time it made the sales in question? If so, please specify.
12. There was no evidence in either case that POSCO had any knowledge at the time of sale that ABC Company was in precarious financial condition. There was, however, evidence that POSCO had prior bad debt experience. See response to question 3.
Q.3. For both parties. Does the record in the plate and/or sheet investigations contain any information regarding non-payment by either US or Korean customers other than ABC company? If so, please specify.
13. The records of these cases contain substantial evidence of bad debts in POSCO's books and records. First, POSCO's chart of accounts contains a number of bad debt accounts, including accounts for "allowance for bad debt accounts receivable" and "allowance for bad debt long term receivable."2 Also, both POSCO and POSTEEL have an account called "bad debt expenses".3 Although POSCO provided no explanation of these accounts, it is reasonable to conclude, based on generally accepted accounting principles (GAAP), that these are reserve accounts which reflect POSCO's experience with bad debt in the form of uncollectible accounts receivable. In fact, POSCO specifically reported that it has incurred bad debts both on its own domestic and export sales, as well as on domestic and export sales made through its Korean affiliate, POSTEEL.4
14. In the SSPC investigation, in POSCO's response to the supplemental questionnaire, filed on 26 August 1998, POSCO reported that, during the period of investigation, it incurred bad debt expenses of { } on its export and domestic sales.5 Further, in the same supplemental response POSCO reported that POSTEEL had incurred bad debt expenses on its export sales in the amount of { } during the period of investigation.6 That amount does not include the bad debt incurred as a result of non-payment by ABC company. Finally, in its response to section B of the questionnaire, submitted on 20 July 1998, POSCO reported that POSTEEL had incurred bad debt expenses on its home market sales in the amount of { } during the period of investigation.7
15. The amounts of bad debt expenses reported in the SSSS case differ slightly from those reported in the SSPC case because the periods of investigation were not the same, and thus the periods for which POSCO reported bad debt were not the same. In its questionnaire response in the SSSS investigation, dated 23 September 1998, POSCO reported that its own bad debt expenses for the period of investigation on both domestic and export sales were { }.8 In the same response, POSCO reported that the bad debt expense of POSTEEL on domestic sales was { }.9 Finally, in its response to the supplemental questionnaire, filed on 23 November 1998, POSCO reported that POSTEEL's bad debt expense on export sales was { }.10
Q.4. For the United States. The United States contends that, in respect of sales through POSAM, the United States deducted an allocated portion of the US bad debt expenses as part of the construction of the export price. Please indicate where in the record of the investigations this statement can be verified.
16. Although the SSPC final determination does not specifically mention this deduction, the SSSS final determination specifically stated with respect to constructed export price sales: "we deducted a per unit direct selling expense to account for bad debt losses incurred by POSAM for sales made to a bankrupt customer."11
17. The actual deduction itself can be seen in the analysis memoranda prepared for the final determinations. The analysis memorandum prepared for the final determination in SSPC is dated 19 March 1999.12 Attachment 1 to this memorandum lists the unpaid sales of SSPC, and includes a total amount of the bad debt.13 The total amount of bad debt is divided by the total quantity of US sales to arrive at a per-unit expense of { }. This is the portion of the bad debt expense allocated to each sale, whether export price or constructed export price. On page 8 of the memorandum, this allocated amount is added to other direct selling expenses to arrive at a total per-unit amount of direct selling expenses on US sales. This amount is assigned the variable DIREXPU. On page 9 of the memorandum, under the designation Constructed Export Price ("CEP") Calculation, in calculating constructed export price, the DIREXPU variable, which, as noted above, included the allocated amount of bad debt, is one of the variables deducted from the gross unit price (designated as "GRSUPRU") to arrive at the net price ("NETPRIU"), i.e. the constructed export price.
18. Note that the variable DIREXPU is not one of the variables deducted in the Export Price (EP) Calculation, also on page 9 of the memorandum. This is because, as the United States has explained in its First Submission and oral statement, the export price for sales made directly to independent US buyers was based on POSCO's actual invoice price to its independent customers; there were no deductions from that price for selling expenses, including bad debt. Thus, Korea's assertion that the United States reduced all export prices to account for bad debt is incorrect. For the comparison of the export price for these direct sales, direct selling expenses, including the bad debt, were part of the "circumstances of sale" adjustment made to normal value.
19. The analysis memorandum for SSSS tells a similar story.14 Attachment 1 to this memorandum lists the unpaid sales of SSSS, and includes a total amount of the bad debt. The total amount of bad debt is divided by the total quantity of US sales to arrive at a per-unit expense of { }. On page 9 of the memorandum, this allocated portion of bad debt is added to other direct selling expenses to arrive at a total per-unit amount of direct selling expenses on US sales (again referred to by the variable "DIREXPU." On page 10 of the memorandum, under the designation Constructed Export Price ("CEP") Calculation, the DIREXPU variable is one of the variables deducted from the gross unit price to arrive at the net price, i.e. the constructed export price.
Q.5. For the United States. Korea states (oral statement at the first meeting, para. 25) that the United States does not argue in its first submission that unpaid sales were an "other difference []. . . demonstrated to affect price comparability". Is Korea correct that the United States does not advance such an argument?
20. Because it is the view of the United States that bad debt falls within the meaning of "conditions and terms of sale" in Article 2.4, we have not relied on the reference in Article 2.4 to "other differences" affecting price comparability. That does not constitute a concession that bad debt could not be treated as an "other difference" demonstrated to affect price comparability, consistent with Article 2.4.
Q.6. For both parties. Article 2.4 provides that "[d]ue allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale . . . ." The use of the term "on its merits" could be taken to suggest that differences in conditions and terms of sale will not always affect price comparability. Do you agree? Please explain your answer.
21. It is the view of the United States that the phrase "on its merits" does not suggest that differences in conditions and terms of sale will not always affect price comparability. Article 2.4 defines the phrase "differences which affect price comparability" to "include" those in the illustrative list that follows. Thus, the differences expressly listed - such as differences in conditions and terms of sale - are differences which affect price comparability. What must be determined and quantified "on the merits" of each case is what allowances are necessary to account for such differences (e.g., it is necessary to determine whether there are physical differences and, if so, what is the proper adjustment to account for such differences), not whether such differences affect price comparability.
Q.7. For the United States. The United States states in its first submission (para. 84) that "[s]elling expenses such as warranty costs and bad debt not only reflect conditions of sale in the market, they are also an element of price. Therefore, differences in such selling expenses affect price comparability." Please provide further elaboration of the US view regarding when differences "affect price comparability".
22. As clarified in our opening statement, it is the view of the United States that the conditions and terms of sale are reflected in expenses that are directly related to the sale, i.e., but for the sale the expense would not be incurred - what the United States refers to as "direct" selling expenses. Some of these expenses relate directly to the terms of sale (e.g., installation expense), others relate directly to conditions generated by the terms of sale (e.g., selling on credit generates bad debt expense). Examples of direct selling expenses include expenses for warranty, credit (including bad debt) and technical assistance. Article 2.4 expressly includes differences in conditions and terms of sale in the illustrative list of differences that affect price comparability. The United States, therefore, always makes allowance for differences in direct selling expenses when comparing export price and normal value.
Q.8. For the United States. Article 2.4 of the ADP Agreement requires that a Member make due allowances for "differences which affect price comparability". It could be argued that this means that, where there are differences that should affect the relative prices charged by an exporter in his home market and export market, the Member should make appropriate adjustments. Applying this approach to the case at hand, the logic of the United States' adjustments in respect of unpaid sales is that POSCO should be charging higher prices in the US market than in the Korean market because defaults are more likely for US purchasers than for Korean purchasers. Please comment.
23. Article 2.4 addresses differences between export price and normal value that affect price comparability, including, inter alia, differences in conditions and terms of sale. In essence, Article 2.4 requires that, if the transactions being compared are not identical in such respects, allowance must be made to neutralize the differences. When the differences affecting price comparability have been eliminated, any amount by which the normal value exceeds the export price is, by definition, dumping.
24. As we have explained in our submissions and our statement before this Panel, bad debt is a direct selling expense, i.e., part of the conditions and terms of sale. Sales made on credit carry an inherent risk of non-payment. Such risk may differ between the two markets being compared and thus have different effects on prices in the two markets. Because it is the only practical means - and a method as reasonable as any other - of making a due allowance for any such difference, we base the allowance on the company's actual bad debt experience in the two markets during the period of investigation.15 That is, we rely on the actual bad debt expenses the company recognizes with respect to each of the two markets being compared. The evidence placed on the record in the cases at issue showed that, during the period of investigation, POSCO actually recognized greater bad debt expenses, as a proportion of sales, in the US market than in the Korean market. This evidence would indicate that POSCO should be charging higher prices in the US market due to a greater proportion of bad debt expenses. Likewise, greater bad debt expenses in the home market would account for higher prices in the home market; therefore the difference attributable to bad debt would not be attributable to dumping. That conclusion is implicit in the Article 2.4 requirement to adjust for such differences to ensure price comparability. As explained previously, through the circumstance of sale adjustment, the United States neutralized any difference in bad debt expense and ensured that the price comparison reflected whether dumping existed, not differences in the conditions and terms of sale.
Q.9. For both parties. In its first submission (para. 65), the United States asserts that it is Article 2.1 of the ADP Agreement, and not Article 2.4, that addresses what sales may be used to establish the export price and normal value. The United States further notes Article 2.1 expressly limits the determination of normal value to sales in the ordinary course of trade, that there is no such limitation in respect of the export price, and that this absence of a limitation must be interpreted as intentional. It could be argued that it follows that Article 2.1 precludes a Member from excluding any export sales. The United States however contends (para. 70) that it may exclude export sales in certain circumstances. Please comment.
25. Article 2.1 defines export price, without limitation, as "the price of the product exported from one country to another." It is the view of the United States that the absence of a limitation on the determination of export price nevertheless permits exclusion of export sales in certain situations. For example, it would be inconsistent with the object and purpose of the AD Agreement to interpret Article 2.1 to override Article 2.4. Thus, if it would be virtually impossible or impracticable to establish a normal value that is comparable, within the meaning of Article 2.4, to certain export sales, it is necessary and appropriate to exclude those export sales from the dumping analysis.16 It is, therefore, permissible to interpret Article 2.1 as permitting the exclusion of export sales in certain situations.
Q.10. For Korea. Korea argues that the "fair comparison" requirement of Article 2.4 of the AD Agreement requires a Member to exclude "atypical sales" where the inclusion of those sales would "distort the results" by increasing the margin. In Korea's view, would a Member also be entitled to exclude "atypical" export sales where those sales would "distort the results" by decreasing the margin?
26. As discussed in response to question 9, above, it is the view of the United States that export sales may be excluded in certain circumstances. The issue of whether a sale should be excluded depends on the particular facts - not whether the exclusion of the sale increases or decreases the margin of dumping.
Q.11. For Korea. In the context of its "multiple averaging" claims, Korea emphasizes that the language "all comparable export prices" precludes "multiple averaging". Can this view be reconciled with Korea's position that the US DOC was required to exclude certain "atypical" export prices from its dumping margin calculations altogether?
27. The United States does not agree with Korea's interpretation of the cited language from Article 2.4.2. However, if the Panel were to conclude, as urged by Korea, that Article 2.4.2 requires "one average" which takes into account "all data", logical consistency would dictate that the allegedly "atypical" sales should not be excluded from the analysis.
Q.12. For the United States. The United States observes (first submission, para. 71) that companies, including POSCO, routinely establish reserve accounts for bad debt. Did the United States have before it in the record of the plate or sheet investigations any information regarding precisely how POSCO and/or POSAM treated bad debt for accounting purposes? Specifically, did POSCO and/or POSAM establish a reserve for bad debt? If so, how was that reserve calculated? Did any such reserve distinguish between anticipated levels of unpaid sales in different markets?
28. The record established that POSCO and POSTEEL, which is responsible for all export sales, maintain bad debt accounts for both domestic and export sales (see response to question 3), indicating that the companies use a reserve accounting method. Although POSCO did not provide specific information about these accounts, such as how the reserves were calculated, under GAAP the reserves should be based on POSCO's bad debt experience. POSCO had the ability to distinguish bad debt expense on home market sales from bad debt expense on export sales, but it did not have the ability to tie specific bad debt expense recognized during the period of investigation to particular products or export markets.
29. With respect to POSAM, the record reveals that the company did not establish a bad debt account. Rather, when POSAM deemed the receivables at issue to be uncollectible, it reversed the accounting entries, effectively "writing off" the sales.
Q.13. In its oral statement, the United States argued that POSCO effectively wrote off the unpaid sales. Is the US referring to the issuing of negative invoices by POSAM (thereby cancelling the sales made to the company that went bankrupt) or does the US have in mind another event? In the view of the US, does the cancellation of the sales concerned preclude the possibility that repayment of the amounts outstanding is obtained by POSCO through bankruptcy proceedings?
30. In the view of the United States, POSAM's issuance of "negative invoices", represents the write off of a receivable the company deems uncollectible, i.e., a bad debt. We note that, although POSAM used negative invoices as the accounting mechanism, these do not constitute "cancelled" sales. Generally, cancellation of a sale occurs before the transaction has been completed. Once delivery has been made, the obligation to pay arises, creating a debt. Thus, by reversing the accounting entries after the debt was established, POSAM was recognizing that the debt was uncollectible, i.e., recognizing a bad debt expense.
31. In accordance with GAAP, a company must recognize and account for receivables that are uncollectible. A receivable may be deemed uncollectible, even though there is some possibility that all or part of the amount owed may ultimately be recovered. Bankruptcy of the debtor is generally grounds for treating an unsecured debt as uncollectible.
Q.1. For both parties. The United States suggests (first submission, para. 182) that the invoices for what Korea refers to as POSCO's "dollar-priced local sales" reflect a price both in dollars and in won ("The reported won amounts were reflected on POSCO's invoices and records"). See also Final Determination in SSSS, p. 59536 (indicating that "for HM channel 2 sales the shipping invoice also shows the won price"). Korea (first submission, para. 3.52) by contrast suggests that the sales in question were invoiced only in dollars and that the invoice did not reflect an amount in won. In its oral statement at the first meeting, however, Korea acknowledged that both dollars and won appeared on the invoices. Please clarify whether the invoices reflected a price in dollars only, or prices in both dollars and won, or whether this varied depending on the invoices in question.
32. Korea's initial statement contained in its first submission (para. 3.52) misstates the facts for both cases. No information on the record of the investigations supports the statement that the sales at issue were invoiced solely in dollars. All tax invoices issued to POSCO's customers with respect to local sales list both a won and dollar amount.17 Shipping invoices for local sales made to "channel 2" customers also list both a won and dollar amount.18 The invoicing of the won amount is consistent with the undisputed evidence in both investigations that POSCO is paid in won.
Q.2. For both parties. To the extent that the some or all of the invoices reflected won as well as dollar amounts, was the amount actually paid in won the same as the amount reflected in the invoice? Please provide details.
33. In the SSPC investigation, POSCO reported the actual won amount listed on the invoice. POSCO never claimed during the SSPC proceeding that the won amount listed on the invoice was not the amount actually paid by the customer. To the contrary, POSCO's statements indicated just the opposite. POSCO stated that the "price in effect on the date of shipment is the price for the shipment." Nothing on the record of the SSPC investigation indicates that the won amount paid by the customer differs from the won amount on the invoice, which was the amount reported by POSCO in its response.19
34. In the SSSS proceeding, the original information provided by POSCO was consistent with the information it provided and positions it took in SSPC. Later in the proceeding POSCO provided other information about local sales that was ambiguous or vague. At verification in SSSS, the United States examined one local sale and discovered a difference between the won amount on the invoice and the won amount actually paid, which reflected the difference between the dollar/won exchange rates between the date of sale and date of payment.20
Q.3. For both parties. Please provide a comprehensive statement, supported by citations to relevant portions of the record, as to exactly what evidence and arguments were put before the USDOC and at what time in each investigation in respect of the issue whether the "local sales" were dollar or won sales. Please address, inter alia, what evidence was placed before the USDOC in each investigation regarding the receipt by POSCO of won amounts that differed from any won amounts reflected in the invoices.
35. The following is a comprehensive review of the evidence and arguments placed before the United States in each investigation.
36. From the evidence placed before it, the United States properly determined in the SSPC investigation that the currency of POSCO's local sales transactions was Korean won, not US dollars. Throughout the course of the investigation POSCO never claimed that the won amounts received by POSCO differed from the won amounts reflected in the invoices and reported to the United States in its response, and there was no evidence on the record to suggest that was the case. The evidence unfolded as follows:
37. In its first questionnaire issued to POSCO, the United States requested that the company report "all expenses and revenues in the currencies in which they were incurred or earned."21 The United States also requested information pertaining to, inter alia, the date of sale for home market sales and the unit price for such home market sales. Specifically, the United States stated that POSCO is to "[r]eport the unit price recorded on the invoice for sales shipped and invoiced in whole or in part."22 The United States stated that "[t]his value should be the gross price for a single unit of measure."23
38. The United States also requested that POSCO report the "terms of payment" for its home market sales and to "indicate whether the payment terms are stated or coded on each invoice or, otherwise, how customers agree to payment terms."24 With respect to prices, the United States also asked POSCO to report "any price adjustments made for reasons other than discounts or rebates" and to "[s]tate whether these billing adjustments are reflected in your gross unit price."25
39. In its 1 July 1998 response, POSCO stated that "[t]he date of sale for all domestic sales is the date of the shipping invoice, whether categorized as a domestic or local sale."26 POSCO further stated that the [t]he price in effect on the date of shipment is the price for the shipment."27 In its 20 July 1998 response where it reported transaction prices for home market sales, POSCO stated that it has "reported the actual invoiced price per metric ton in Korean Won. In the home market, POSCO made local letter of credit sales ("local sales") and domestic sales. All sales were paid in Korean Won and have been recorded in Korean Won on the database."28
40. In this investigation, the company consistently presented these as won sales. In discussing the payment terms, POSCO simply stated that "POSCO's home market customers pay on an open (i.e., revolving) account basis that is the normal method of payment in the Korean domestic market."29 In response to the question about billing adjustments, POSCO noted generally that the adjustments were made "to correct the price on the original invoice."30 POSCO, however, reported no adjustment to the local sales price for any difference between the invoice price and the amount of payment.
41. On 26 August 1998, POSCO submitted revised computer databases to reflect changes in response to the United States' supplemental questions. POSCO also made "minor corrections" to errors discovered by the company in preparing the supplemental response. In that response, POSCO noted that it "has also added the US dollar sales price for local sales, as reflected on the invoice, for reference purposes."31
42. Later in the proceeding, POSCO began to change its story. On 16 October 1998, POSCO submitted another revision of its databases to make corrections to cost information. POSCO stated in this submission that it also modified the home market sales to report local sales and related charges "in the currency in which the sales and associated charges were incurred, i.e., US dollars."32 POSCO stated that in prior submissions both the won and the US dollar prices were reported for local sales. POSCO explained that "[a]ll charges, however, were calculated and reported based on the won."33 In the October 16 submission, POSCO recalculated and reported all associated charges, such as indirect selling expenses, "on the basis of a dollar price," rather than the won price earlier reported.34 In this response, POSCO claimed that "the won price and the billing adjustments (also shown in won) are included for reference purposes."35 However, POSCO did not claim that the sales were not paid in won, or that it received an amount other than what was reflected on the invoice.36 In fact, POSCO argued that "Won amounts should be converted to US dollars based on the daily exchange rate." POSCO claimed that the changes were made "to allow the [United States] to properly analyze local sales on a dollar basis in line with its practice,"37 apparently a reference to the Roses exception, which the United States found inapplicable. POSCO further suggested that the United States "maintain the dollar value of the local sales until the final steps of the calculation,"38 a statement which appears to urge the United States to convert the dollar figures into won.
43. In its preliminary determination, the United States excluded POSCO's local sales from the calculation of normal value because it was unclear whether the sales were in fact, domestic sales, or export sales.39 The United States preliminarily decided to disregard the sales because it found that POSCO had "knowledge that these sales are not consumed in the foreign market."40 44. The US domestic industry immediately sought to have the United States' preliminary determination amended, arguing that the exclusion of local sales was a ministerial error.41 POSCO agreed that the sales should be included in the normal value calculation, but noted, inter alia, that the impact on the margin was roughly one percent and, therefore, was not considered to be "significant" as defined by the Department's regulations for purposes of amending preliminary determinations.42 The United States did not amend its preliminary determination, but noted that it would consider this issue further for the final determination.43
45. The United States conducted verification of POSCO's home market sales response from 9 November, through 13 November 1998.44 At the outset of the verification, the United States' normal practice is to request that a company state any corrections to its response.45 POSCO notified the United States of six corrections to its response at the outset of verification.46 It said nothing to suggest that the won amount on the invoices and reported to the United States was not the amount paid by the customer.47
46. The United States informed POSCO that it would conduct verification of specific sales by tracing the sale "from initial inquiry/order through to payment by the customer."48 The United States' verification is a spot check of the information submitted by the company designed to test the accuracy and adequacy of the response. Following its normal practice, the United States informed POSCO that it would trace documentation for five home market sales and would select additional sales to test during the course of verification.49 The United States verified that POSCO received payment for the home market sales selected, and noted no discrepancies in the verification of POSCO's response.50
47. One home market sale selected for verification was a local sale. The United States examined the order sheet, mill certificate, invoice, shipping list, tax invoice and the first quarter 1997 price sheet for the customer.51 None of these documents indicated that the won price listed on the invoice and reported by POSCO differed from the payment amount, nor did POSCO at any time during the investigation make any claim to the contrary.
48. In its case brief, POSCO contended that the information collected at verification demonstrates that local sales were negotiated and invoiced in US dollars.52 POSCO argued that "[l]ocal customers pay POSCO in Korean won based on the US dollar invoiced price."53 POSCO argued that it made changes to its database consistent with the United States' questionnaire which requests respondents to report all expenses and revenues in the currency in which they were incurred or earned.54 Although POSCO opposed the use of won prices generally, at no time did it argue that the won price on the invoice was not the final won price.
49. In its final determination for SSPC, the United States weighed the evidence and determined that the currency of the local sales transactions was Korean won. The United States, relying on the record developed during the investigation, stated that although the invoice includes a price in US dollars, the customers pay for the sales in won, not US dollars, and the sales value of the merchandise is charged to the sales ledger in won.55
50. In the SSSS investigation, POSCO provided similar responses to the United States' questions. From the evidence placed before it, the United States properly determined in the SSSS investigation that the currency of POSCO's local sales transactions was Korean won, not US dollars. In this case, as in the prior investigation, there was no evidence indicating that dollars ever changed hands between POSCO and its customers for the sales at issue. The evidence unfolded as follows:
51. In its first questionnaire issued to POSCO, as in the prior case, the United States requested that the company report "all expenses and revenues in the currencies in which they were incurred or earned."56 The United States also requested information pertaining to, inter alia, the date of sale for home market sales and the unit price for such home market sales. Specifically, the United States stated that POSCO is to "[r]eport the unit price recorded on the invoice for sales shipped and invoiced in whole or in part."57 The United States stated that "[t]his value should be the gross price for a single unit of measure."58
52. As in the prior case, the United States also requested that POSCO report the "terms of payment" for its home market sales and to "indicate whether the payment terms are stated or coded on each invoice or, otherwise, how customers agree to payment terms."59 The United States also requested, again in its first questionnaire, that POSCO report "any price adjustments made for reasons other than discounts or rebates" and to "[s]tate whether these billing adjustments are reflected in your gross unit price."60
53. In its 2 September 1998 response, POSCO stated that "[t]he date of sale for all domestic sales is the date of the shipping invoice, whether categorized as a domestic or local sale."61 POSCO further stated that "[t]he price in effect on the date of shipment is the price for the shipment."62 In that response, POSCO reported transaction prices for home market sales, and stated that it has "reported the actual invoiced price per metric ton in Korean Won. In the home market, POSCO made local letter of credit sales ("local sales") and domestic sales. All sales have been recorded in Korean Won on the database."63 POSCO further noted that a US dollar amount has also been reported for local sales "[f]or ease of verification."64
54. In discussing the payment terms, POSCO stated, as in the prior case, that "POSCO's home market customers pay on an open (i.e., revolving) account basis that is the normal method of payment in the Korean domestic market."65 For the billing adjustments, POSCO stated that it has provided "the billing adjustments that are reflected in the gross price" and that price adjustments were "generally issued to correct a data entry error or to correct the price on the original invoice."66 But for local sales, POSCO again reported no adjustment to the won invoice price that was reported to the United States.
55. On 23 October 1998, the United States issued a supplemental questionnaire to POSCO requesting that POSCO provide a copy of an invoice for a home market sale and specifically instructed the company that "[i]f any of your sales are invoiced in dollar amounts, please indicate how payment was received. If payment was received in won, please indicate what exchange rate was used."67 In response, POSCO stated that it "invoices local sales in dollars, and books the sale in its sales ledgers in won using the daily exchange rate in effect on the date of sale." POSCO provided sample documentation for a local sale and stated that "[t]he details on the per ton price are noted on the shipping list detail which is sent to the customer, with the total dollar amount recorded on the tax invoice." POSCO indicated that "[p]ayment is received on a local letter of credit basis in dollars as well. Payment is booked in won with the difference in the exchange rate on the date of sale and the date of payment."68 POSCO submitted a modified sales listing to report local sales and the related charges in dollars.69 POSCO indicated that the won amounts were now provided for reference purposes, and suggested that the United States "maintain the dollar value of the local sales until the final steps in the [anti-dumping] calculation."70 POSCO did not claim that the won amount reported earlier was not the won amount paid by the customer and received by POSCO for such sales.
56. In its 4 January 1999 preliminary determination, based upon POSCO's arguments, the United States concluded that POSCO's local sales were, in fact, consumed in the home market and therefore included the sales in its normal value calculations, as POSCO requested. However, in including those sales in its normal value calculations, the United States mistakenly applied a currency conversion to the dollar-denominated amount of the sale.71
57. The United States conducted verification of POSCO's home market sales response from 22 February, through 26 February 1999.72 At verification, POSCO explained that while domestic sales are made on an open account, local sales are made on a contract basis, with a local letter of credit. The United States examined a local letter of credit involved in a local sale and determined there were no discrepancies.73 The United States traced a local sale and tied the sale from POSCO's order sheet to a cumulative shipping list/invoice and tax invoice. The United States also verified that POSCO recorded the sale in its books in won as reflected in the tax invoice to the customer. For that sale, the United States found that the won amount listed on the invoice and reported by POSCO in its response was not the won amount actually paid by POSCO's customer and that differences between the recorded sales amounts and payment amounts are reflected in the company's "Foreign Exchange Currency Loss of Transaction for Local Sales" account.74
58. In its case brief, POSCO once again argued that because it negotiates and invoices its customers in dollars, the United States should use the dollar amount in its calculations. However, POSCO also stated once again that local customers "pay POSCO in Korean won based on the US dollar invoice price."75 59. Although the record in SSSS contained more information concerning the dollar prices on the invoices, much of that information was vague or contradictory and was obtained late in the proceeding. For its final determination, the United States weighed all of the evidence and determined that the currency of the local sales transactions was Korean won. As in the prior case, relying on the record developed during the investigation, the United States based its stated determination on the fact that the customer pays in won, not US dollars, and the sales value of the merchandise is charged to the sales ledger in won.76
Q.4. For both parties. Is there anything in the record of the investigations indicating why these sales were paid in won if, as argued by Korea, they were in fact denominated in dollars?
60. Although POSCO repeatedly stated that it was paid in won for these sales, nothing in the record of these investigations indicates why, if these were in fact dollar sales, they were paid in won.
Q.7. For the United States. Do you agree that the exchange rates that you refer to as POSCO's "internal exchange rates" are the market exchange rates announced by the Korean Exchange Bank'?
61. Yes. Although the United States made no factual determination as to whether POSCO's "internal exchange rates" are in fact the same exchange rates announced by the Korean Exchange Bank for Inward Remittances, POSCO has stated that it used the daily exchange rates provided by the Korean Exchange Bank for Inward Remittances.77
Q.8. For the United States. The United States asserts (first submission, para. 192) that, "[c]ontrary to Korea's claim, a comparison of the exchange rates demonstrates that during the month of November 1997, the rates varied by as much as { } percent." Please state the source for this statement. Is the United States here comparing POSCO's "internal" exchange rate to the US Federal Reserve's daily exchange rate or to the USDOC's "official exchange rate"?
62. The United States is comparing POSCO's internal exchange rate to the daily exchange rate provided by the US Federal Reserve. The chart in footnote 161 of the United States' first submission sets out the calculation. The source for the data used in the calculation is as follows:
Q.9. For the United States. The United States asserts (first submission, para. 177) that "Article 2.4.1 cannot be read to require that currency conversions be avoided in any particular circumstances." In the view of the United States, would a Member be permitted by the AD Agreement to engage in currency conversion in a case where all the sales in both markets were indisputably both invoiced and paid in the same currency? If not, what provision of the AD Agreement would regulate such behaviour?
63. No. Article 2.4.1 establishes the rules to be applied in converting foreign currencies, whenever a Member determines that the comparison of export price and normal value requires a conversion. A conversion is required only if the sales to be compared were transacted in different currencies. Article 2.4.1 presupposes that a conversion is necessary, i.e., that the transactions were made in different currencies and that a currency conversion is therefore necessary. The issue of whether a currency conversion is necessary rests upon the facts of each case that demonstrate the currencies in which the sales are transacted. In the hypothetical scenario posited by the Panel, where all relevant sales in both markets were "invoiced and paid" in the same currency, there would be no need to engage in any currency conversion because the condition for a currency conversion would not have been satisfied in that case.
Q.10. For the United States. Assume that the United States had determined that the sales in question were dollars sales, not won sales, and that there was no dispute among the parties on this point. Would it in the view of the United States have been consistent with Article 2.4.1 of the AD Agreement to nevertheless convert those sales into won and then back into dollars? Would any other provision of the AD Agreement be implicated?
64. Assuming arguendo that the sales in question were dollar sales, the United States would use the dollar amount of such sales and make no currency conversion. In the United States' view, if both the export and domestic sales are in the same currency, the comparison under paragraph 4 does not require a conversion within the meaning of Article 2.4.1.
Q.11. For the United States. Please clarify how USDOC established the exchange rate applied to the sales which it found were won-denominated. Did it use the "official exchange rate" or daily exchange rates? Did it convert as of the date of sale of the "local sales" or as of some other date? Please address specifically Korea's statements in footnote 142 to its first submission and para. 58 of its oral statement, referring to the exchange rate on the date of the US sale.
65. Although there may be some confusion in terminology, the "official exchange rate" simply refers to the exchange rate actually used by the United States for a given day. This term is contrasted with the raw "daily rates" provided by the Federal Reserve which have not been modified, for example to ignore "fluctuations" pursuant to Article 2.4.1. Thus, the "official exchange rate" for a particular day will usually be a daily rate, although it may be an average benchmark rate if the daily rate on that day is a "fluctuation."
66. As in most cases, in the cases before the Panel, for all won sales, including "local sales," the official exchange rate used by the United States was the daily rate, except on those occasional dates on which it identified an exchange rate "fluctuation" pursuant to Article 2.4.1 (in which the rate used was a rolling-average "benchmark" rate). As discussed elsewhere, however, unlike most cases, during the period of severe devaluation, November and December 1997, the United States used daily rates, even though its normal methodology would have identified the daily rates during this period as fluctuations and applied the benchmark rate.80
67. In accordance with Article 2.4.2, the United States first established weighted-average of normal values for comparison with weighted-average export prices of all comparable transactions. For each weighted-average normal value, after identifying the comparable export transactions, the United States calculated a weighted-average exchange rate based upon the dates of those comparable US transactions. The weighted-average normal value was then converted into US dollars using that weighted-average exchange rate.
68. Korea has not challenged the methodology of converting each normal value average based on the exchange rates in effect on the dates of the comparable export sales. Thus, the Panel need not address that issue. Rather, Korea argues, in footnote 142, that the "double-conversion" of currencies was inconsistent with Article 2.4.1 and was distortive. As the United States has argued, there was no "double conversion" in this case. The United States made one currency conversion - from Korean won into US dollars. No other conversion was necessary, or made, for the sales at issue. The single conversion was based upon a factual determination that the sales at issue were made in won, not dollars. Accordingly, the United States currency conversion in these investigations is consistent with Article 2.4.1.
Q.13. For the United States. In respect of the differences between POSCO's "internal" exchange rate and that of the NY Federal Reserve, Korea notes (first submission, para. 4.74) the existence of a time-lag between Korea and New York which it considers explain those differences. Please comment.
69. The United States does not know the cause of the difference in exchange rates between the Korean Exchange Bank and the US Federal Reserve. In the United States' view, the issue before the Panel is not a question of which source for exchange rates is more accurate. Rather, it is a question of whether the United State's determination that these were won sales was based on an objective assessment of properly established facts and whether the exchange rates used by the United States satisfy the requirements of Article 2.4.1.
70. Korea has raised a "time-lag" issue in the context of its transparency argument. In the view of the United States, the exchange rate methodology applied by the United States - which includes the use of the NY Federal Reserve rate - is highly transparent. While there are some natural and inherent constraints to ascertaining the exchange rate on the day in which a transaction occurs, companies can ascertain with certainty the daily exchange rate to be applied in an anti-dumping calculation. As discussed in its first submission, the United States has publicly announced, for purposes of anti-dumping analysis, that it will use its official exchange rates for currency conversions. The methodology used by the United States to ascertain the exchange rates for its dumping analysis has also been published. The purpose of these and other actions is to "ensure that all exporters, when they set their prices and whether under [an anti-dumping] order or not, can know with certainty the daily exchange rate the Department will use in a dumping analysis."81 As noted earlier, along with knowledge of the source of rates and the rules to be applied, the United States has taken the unusual step of publishing on the Internet the computer code to allow parties to reproduce the United States' calculations and thus "monitor exchange rates" to ensure that companies can ascertain the applicable exchange rate. Companies can, with the knowledge of the United States' rules, reasonably determine the daily exchange rate. The rules, and the tools for monitoring and determining the exchange rates, are published and available to all companies.
Q.14. For the United States. In its oral statement (para. 41), the US asserts that the USDOC did not engage in a "double conversion" because it took directly the won amounts reported by POSCO for the so-called "local" sales. However, in the "preliminary analysis memorandum" for sheet & strip, the USDOC recognized that "for all sales in the home market involving dollar denominated transactions, we have applied a currency conversion to Korean won on the date of the home market sale" (item L., at page 9). Is this not an indication that the USDOC converted the "local" dollar sales into won prior to converting them into dollars and that in so doing the USDOC did undertake a "double conversion"?
71. The methodology used in the SSSS final determination differed from the preliminary determination; there was no double conversion in the final determination. In its first submission to the Panel, the United States indicated that in SSSS it "mistakenly converted the dollar-denominated amount into won for the preliminary determination."82 The United States, however, corrected the error in the final determination in SSSS. For the final determinations in both SSPC and SSSS, the United States made one currency conversion from Korean won into US dollars. No other currency conversions were made in these cases.
Q.15. For the United States. In its oral statement (para. 39), the US explains that the USDOC was not provided enough evidence by POSCO attesting the fact that POSCO received won amounts other than the amounts reflected in the invoices. The US seems to suggest that this is one of the reasons why the USDOC refused to consider the "local" sales as dollar sales. Could the US explain why this important argument appears to be omitted from the determinations and memoranda relevant to the case?
72. The picture Korea presented to the Panel in this matter differs from what POSCO presented to the United States during the course of the investigations. In SSPC, there was no evidence at any time during the investigation that the won amounts listed on the invoices and reported by POSCO varied from the won amounts actually paid by the customer. In SSSS, as discussed above, there was additional information about these transactions, but it was insufficient to persuade the United States that there was a basis to treat these sales as dollar transactions.
73. The final determinations were based on the positive evidence that these were won sales - not on a lack of evidence. The determinations and analysis memoranda reflect the basis for the determinations. The status of the record only became an issue in this proceeding before the Panel. The United States raised this evidentiary issue in response to Korea's repeated statements that customers did not pay "the won amount on the invoice" in support of its argument that the prices were set in dollars. In light of the standard of review, it was necessary for the United States to point out that this fact was never asserted or established on the SSPC record and was asserted but inadequately supported on the SSSS record.
1 Similarly, holding the requirement of a fair comparison
separate from the requirement of comparability implies that a comparison of two
prices which are not comparable could be fair, clearly an absurd result.
2 See, US Ex. 20.
3 US Ex. 37. Chart of Accounts from sec. A
4 Note that POSCO was unable to separately identify the source
of its bad debts. Consequently, the figures reported by POSCO and discussed in
the response to this question are for all products. POSCO did, however allocate
a portion of these expenses to US and home market sales of the subject
merchandise.
5 US Ex. 38. POSCO reported a single figure for both export and
domestic sales. POSCO's records gathered at verification reveal the actual
amount of this bad debt expense to be { } won. US Ex. 39.
6 US Ex. 38. The POSTEEL records gathered at verification
reveal that the actual amount of POSTEEL's bad debt expense on export sales,
which are designated as POSTRADE sales, was { } won. US Ex. 39.
7 US Ex. 40.
8 US Ex. 41.
9 Id.
10 US Ex. 42.
11 SSSS Final Determination, at 30668.
12 See, Memorandum to the File from Carrie Blozy, Case Analyst,
entitled Analysis for the final determination in the investigation of
stainless steel plate in coils from Korea - Pohang Iron & Steel Company,
dated 19 March 1999 (US Ex. 35).
13 The United States calculated the amount of the bad debt
expense in accordance with the method used by POSAM in its accounting records.
Because of the method used by POSAM to account for these uncollectible
receivables - the reversing entries to accounts receivable and sales - the
actual expense recognized by POSAM was the cost of the goods sold, i.e,
the transfer price from POSTEEL to POSCO, rather than the amount of the
receivable. SSPC POSAM Verification Report at 8 (US Ex. 9); SSSS POSAM
Verification Report at 6-7 (US Ex. 10). The United States also based the
calculation of the bad debt expense on the cost of the goods sold. However,
because transfer prices between associated companies are deemed to be
unreliable, the United States constructed the value of the merchandise POSAM
purchased from POSTEEL. The result was a reasonable valuation of the bad debt
expense as accounted for in POSCO�s records, which POSCO did not contest.
14 See, Memorandum to the File from Maria Dybczak, Case
Analyst, entitled Analysis for the final determination in the Investigation of
Stainless Steel Sheet and Strip in Coils from Korea - Pohang Iron & Steel
Company (�POSCO�), dated 19 May 1999 (US Ex. 36).
15 This type of "snap shot" analysis is also used for other
expenses that cannot be specifically determined for the sales during the period
of investigation because of the nature and timing of the expense, e.g.,
warranty and research and development.
16 In its first submission, the United States provided examples
of such cases which involved small volumes of defective merchandise, or further
manufactured products. See US First Submission, at footnote 68 and accompanying
text.
17 5 January 1999 Sales Verification Report for POSCO in SSPC,
at Exhibit 6. (ROK Ex. 6). See also 6 April 1999 Sales Verification Report for
POSCO in SSSS, at 14 (ROK Ex. 19) and Exhibit 17 (ROK Ex. 46).
18 5 January 1999 Sales Verification Report for POSCO in SSPC,
at Exhibit 23. (US Ex. 50). (For sales in home market channel 1, POSCO�s
customers contacted POSCO directly to make purchases. POSCO issued both the
shipping invoice and the tax invoice to these customers. For sales in home
market channel 2, customers contacted POSCO�s subsidiary, POSTEEL, to make
purchases. For these sales, POSCO issued the shipping invoice to the customer,
while POSTEEL issued the tax invoice to the customer. For home market sales in
channel 2, POSCO�s shipping invoice lists both a won and dollar amount.) See 2
September 1998 Section A Response in SSSS, at A-17 and A-18 (US Ex. 46); See
also 1 July 1998 Section A Response in SSPC, at A-14 and A-15. (US Ex. 37).
19 See the United States� response infra, at question 3
for a complete examination of the evidence and arguments on the record in
the SSPC investigation.
20 See the United States� response infra at question 3
for a comprehensive examination of the evidence and arguments on the record of
the SSSS investigation.
21 Anti-dumping Questionnaire, at B-20. (US Ex. 2).
22 20 July 1998 Section B-D Response, at B-22 (repeating the
question from the original questionnaire). (US Ex. 40)
23 Id.
24 Id. at B-18.
25 Id. at B-23.
26 See, 1 July 1998 Section A Response, at A-14. (US Ex.37).
27 Id.
28 20 July 1998 Section B-D Response, at B-22 (footnote
pertaining to duty drawback omitted). (US Ex. 40).
29 Id. at B-17 and B-19.
30 Id. at B-23.
31 26 August 1998 Section B-C Supplemental Response, at 1, n. 2
(emphasis added). (US Ex. 38).
32 16 October 1998 Section D Supplemental Response, at 1. (US
Ex. 43)
33 Id.
34 Id. at D-2.
35 Id. at n. 3 (emphasis added)
36 Id.
37 Id.
38 Id.
39 SSPC Preliminary Determination, 63 Fed. Reg. at 59536
(4 Nov. 1998). (ROK Ex. 4).
40 27 October 1998 Preliminary Analysis Memorandum for POSCO, at
2. (ROK Ex. 5).
41 5 November 1998 Comments filed by the US domestic industry,
at 3. (ROK. Ex.47).
42 6 November 1998 Response by POSCO to US domestic industry, at
3-4. (US Ex. 48). See also 23 November 1998 Memorandum on Ministerial Error
Allegation, at 2-3. (US Ex. 44).
43 Id. at 2-3.
44 5 January 1999 Sales Verification for POSCO, at 1. (ROK Ex.
6).
45 2 November 1998 Verification Outline for POSCO, at 2. (US Ex.
45).
46 5 January 1999 Sales Verification Report for POSCO, at 1-2
(summarizing POSCO�s pre-verification corrections to its response). (ROK Ex. 6).
47 See generally, Id. at 1-2.
48 2 November 1998 Verification Outline for POSCO, at 4. (US Ex.
45).
49 Id. at 4 and Appendix I
50 5 January 1999 Sales Verification Report for POSCO, at 21,
para.12, and 14. (ROK Ex. 6).
51 Id. at 4 and Ex. 6.
52 26 January 1999 POSCO Case Brief, at 4. (ROK Ex. 7)
53 Id.
54 Id. at 5.
55 SSPC Final Determination, 64 Fed. Reg. at 15456 (31
Mar. 1999). (ROK Ex. 11).
56 Anti-dumping Questionnaire, at B-20. (US Ex. 2).
57 23 September 1998 Section B-D Response, at B-21 (repeating
the question from the original questionnaire). (US Ex. 41).
58 Id. at B-21 and B-22.
59 Id. at B-18.
60 Id. at B-23.
61 2 September 1998 Section A Response, at A-16. (US Ex. 46).
62 Id. at A-17.
63 23 September 1998 Section B-D Response, at B-22. (US Ex. 41).
64 Id.
65 23 September 1998 Section B-C Response, at
B-16 and B-18. (US Ex. 41).
66 Id. at B-23.
67 23 October 1998 Supplemental Questionnaire, at Attachment I,
at no. 11. (US Ex. 47).
68 23 November 1998 Supplemental Response, at 19 (ROK Ex. 45),
and Ex. B-26. (US Ex. 42).
69 Id.
70 Id. at 20, n. 7. (US Ex. 42).
71 17 December 1999 Preliminary Analysis Memorandum for POSCO,
at 9. (US Ex. 48).
72 6 April 1999 Sales Verification for POSCO, at 1. (ROK Ex.
19).
73 d. at 11.
74 Id. at 14.
75 15 April 1999 POSCO Case Brief, at 4. (ROK Ex. 20).
76 SSSS Final Determination, 64 Fed. Reg. at 30678 (8
June 1999). (ROK Ex. 24).
77 See, e.g., 6 April 1999 Sales Verification Report for POSCO
in SSSS, at 14. (ROK Ex. 19).
78 See also ROK Ex. 44.
79 See also ROK Ex. 50.
80 In the First Submission of the United States, at footnote
161, the United States stated that it inadvertently used �adjusted exchange
rates� in the SSPC case solely for purposes of determining, pursuant to Roses
from Columbia, whether POSCO�s exchange rate mirrored the rate the United
States would have used, i.e. the �official exchange rate.� The �adjusted
exchange rates� referred-to are the rates produced by the normal methodology
which did not take into account the devaluation during November and December
1997, i.e. which used benchmark rates rather than daily rates during this
period. However, as demonstrated by the table in that footnote, use of the daily
rates for this comparison still reveals that POSCO�s rates differed
substantially from the rates being used by the United States.
81 Notice: Change in Policy Regarding Currency Conversions,
61 Fed. Reg. at 9435. (ROK Ex. 49).
82 First Submission of the United States, at 51, n. 158.
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